Published: Tue, May 22, 2018
Health Care | By Cedric Leonard

Ryanair's profit up 10 pct to 1.45 bln euros

Ryanair's profit up 10 pct to 1.45 bln euros

Profits increased previous year even as Ryanair was forced to cancel a large number of flights due to scheduling mistakes and pilot strikes.

The airline said traffic grew 9% to over 130 million, despite grounding 25 winter aircraft.

The company warned profits would fall back to €1.25bn to €1.35bn in the current year, a decline of up to 14%, due to rising oil prices and almost €200m of extra staff costs.

Ancillary revenue growth from baggage fees, on-board food and services, is not expected to offset the impact of higher costs and lower air fares.

Ryanair had cancelled 20,000 flights previous year, affecting 700,000 passengers globally.

Problems began after the airline admitted in September it had "messed up" pilots' holiday, leaving it unable to staff all its scheduled flights.

Ryanair has since started work on union recognition for the first time in its history - agreeing deals with pilots' unions in the United Kingdom and Italy. It expects traffic to grow by seven per cent to 139m, with load factors flat at 95 per cent. "We are working hard to increase staffing at our larger bases, re-designing boarding procedures, and providing additional spare aircraft in summer 2018 to improve our punctuality to our 90% target, which is a key Always Getting Better [improvement program] target for the coming year", O'Leary said.

But she added last year's crisis over rosters was prompting change at the airline.

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Speaking to CNBC on Monday, O'Leary said: "Clearly $80 a barrel oil is going to bring casualties in Europe this winter".

Average fares declined by 3 percent over the year and O'Leary said he expected European Union capacity growth to continue to have a downward effect on ticket prices.

Ryanair Chief Marketing Officer Kenny Jacobs, who also spoke in Dublin, cautioned that fleet decisions ultimately come down to price, which might mean the airline "ends up always being Boeing".

Mr O'Leary said that Ryanair planned to restrict non-EU shareholders' voting rights in order to prepare the airline for a hard Brexit in March 2019.

"The thinking is Ryanair Holdings will evolve probably into a holding company not dissimilar to IAG over the next two to three years, O'Leary said on an earnings call with analysts after the release of the company's full-year results on Monday".

He added: "Forward bookings are strong but pricing remains soft".

"Average fares past year declined by 3%, which was good news for our guests but bad news for competitors", the company said.

Given the earlier timing of Easter this year, it anticipates a 5% fare decline in the first quarter but a 4% rise in the second quarter.

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